THE Philippines has the most favorable economic outlook in Southeast Asia, as firms operating here are expecting their revenues to increase on the back of higher selling prices.
In a survey by professional services network Grant Thornton International, firms based in the country were reported to be the most optimistic of growth within the region. The survey claimed 70 percent of Philippine respondents expect their revenues to go up this year, while 5 percent are staring at a decrease.
On the other hand, 70 percent of Indonesian firms are also anticipating revenues to improve, but 8 percent are preparing for losses.
Further, 65 percent of businesses in Vietnam are presuming revenues will increase; 47 percent in Malaysia; 45 percent in Thailand; and 39 percent in Singapore. The global average was at 53 percent, according to the poll.
Philippine firms are expecting revenues to expand largely because they are planning to hike selling prices this year.
The survey reported 66 percent of businesses operating locally will increase the prices of their goods and services—the highest among the 35 economies polled by Grant Thornton. It also found 64 percent of firms in Indonesia will raise prices; 45 percent in Vietnam; 37 percent in Malaysia; 33 percent in Thailand; and 28 percent in Singapore.
Upbeat vs reserved
Moreover, the poll revealed 52 percent of businesses in the Philippines intend to augment exports this year, 62 percent to employ more workers and 65 percent to increase salaries by at least in line with inflation.
Overall optimism in the economy was at net 66 percent, the poll computed. Grant Thornton found this figure in contrast with the more reserved global outlook at net 39 percent, and even in Southeast Asia at net 42 percent.
Francesca Lagerberg, global leader for network capabilities of Grant Thornton International, said economic fundamentals remain strong and opportunities exist in spite of escalating geopolitical tensions, such as the virtual trade war between the United States and China.
“As the economic cycle cools, it’s clear that business globally won’t have it as good as they did in 2018. However, with the IMF [International Monetary Fund] predicting global economic growth of 3.7 percent, predictions of a recession are the exception rather than the rule,” Lagerberg argued.
She added tensions will ease soon and the global economy will “return to normality with more balanced and sustainable growth for economies.”
The Grant Thornton survey tallied the views and expectations of more than 5,000 business leaders across 35 economies, including the Group of 20. The poll covered 73 respondents from the Philippines.
As published in BusinessMirror, dated 28 January 2019